Alibaba Group Holding Ltd. is in the advanced stage of talks to infuse a sum nearing US $ 300 million in the online luxury fashion marketplace Farfetch Ltd., according to the Information.
The break of the news send London-based Farfetch’s shares soaring 16 per cent to US $ 32.59.
Apart from the investment, the two retailers are in talks to create a Chinese joint venture and Cartier-owner Richemont, which has partnered with Alibaba to create mobile apps, is also considering an investment in Farfetch alongside the Chinese conglomerate.
Alibaba’s competitors JD and Tencent are already investors in Farfetch and the luxury platform has been eyeing the lucrative Chinese luxury market for expansion.
As per some reports, Chinese consumers are responsible for nearly a third of luxury goods purchases across the world.
Other than this, Alibaba is looking to further leverage its digital presence to support Sun Art’s 480 hypermarkets and mid-size supermarkets in China. This is a move to expand its offline footprint.
Alibaba, which already owned 21 per cent of Sun Art through a unit, will raise its stake to around 72 per cent through the acquisition of a similar stake in A-RT Retail Holdings, who owns 51 per cent of Sun Art.
